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tv   BBC Newsnight  WHUT  April 23, 2011 7:00pm-7:30pm EDT

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>> this is bbc "newsnight." funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. the john d. and catherine t. macarthur foundation. and union bank. >> union bank has put its
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financial strength to work for a wide range of companies, from small businesses to major corporations. what can we do for you? >> and now, bbc "newsnight." >> the price of gold hits a new high. investors remain uneasy about economic stability. is this a sign of trouble to come? economists debate what lies ahead. >> growth is patchy. investors are starting to think you need to diversify your portfolio. there are worries about inflation. >> the british whetting is less than a week away. why do republicans seem to be a dying breed? michael crick tries to find them. >> the death mask of oliver cromwell. why are we british so keen on the monarchy?
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>> we will ask republicans and will this region royalists' about the health of the british monarchy. -- we will ask republicans and realists about the health of the british monarchy. >> all that glitters is gold if you look at commodities this week. precious metals soared to about $1,500 an ounce. there could be a gold bubble. gold has risen in value as investors look rising inflation and the debt crisis in the u.s. is the rush to gold a sign of economic woes ahead? here is our economics editor. ♪ >> it is supposed to beat the measure of global instability. if so, the gold price is trying to tell us something. but what? in a world traumatized by financial fiddles, at least
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israel. >> it is rare. we know what the existing stock above ground is. it is 55,000 tons. it is indestructible. the pricing makes it the opposite of that. >> over the past five years, gold has risen spectacularly. it took off again with lehman brothers and the instability rising has not stopped it. in east london, the streets are not paved with it. but there are a lot of goldsmith's. they specialize in designs for the asian community. at street level, even since the gold from lee -- gold frenzy. >> some of their savings are going into buying gold bullion. there is a trend like that. >> what kind of people by that? >> people like yourself. >> ordinary people.
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>> they are buying it routinely every few months. as a way of saving. >> they have increased the weight of the gold. it is great. you get the feeling of luxury. >> the rising price has changed the way he has done business. he has moved up market with a new designer. there is no doubt that economics are behind the price rise. >> confidence in the u.s. economy is going down. it is the asset of last resort. with all the unrest in the middle east, is the only asset that people feel comfortable with. >> as of today, this krugerrand with one else of gold is worth $1,500. there is a reason ordinary people buy gold like this. it is the same reason investors buy it. it is an insurance policy against inflation, banks
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collapsing, and political instability. there is a lot of all that around. >> to talk about the state of the global economy, i spoke to the professor, a british politician, and a former economic adviser to president bush. professor, are you concerned the rush to gold is an indication of continuing problems in the u.s. economy in particular? >> it is worries about the global economy. the world is looking volatile. growth is patchy. investors are diversifying. there are clearly worries we will see inflation. fiscal tightening means that central banks have to keep their feet on the monetary trigger. it is a hedge. it does mean the world economy is looking vulnerable. >> do you think it is an
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indication that there are fears about the u.s. economy? does it have to do with the deficit? >> that is right. it is not only the price of gold rising, but also the price of oil, copper, and other minerals. all of these solid assets are going up in price. the value of the dollar is going down. why is the value of the dollar going down? because of quantitative easing, the large amount of liquidity, and because ben bernanke is trying to stimulate the u.s. economy because the fiscal situation is so poor. the budget situation is so poor. the dollar is losing value. >> is this as much about confidence? the u.s. has growth. it is not seen by people in a
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way that they can trust it. >> the big worry is that central banks have to keep the stimulus going. that is what rescued us from this situation. we have this dilemma. on one hand, revenues are not coming in. we have to keep monetary policy going. growth is unstable. it is low in many countries. this is a great financial crisis. it has not been fixed. it is continuing. the mistake the world has made was to think it is over. it is not over at all. the banks are not lending. >> it is not over. if you look at the rush to gold, the deficit is not being cut fast enough. >> the increase in the price shows the amount of uncertainty in the economy and around the world. one thing we need to do to reduce uncertainty is get a grip on the fiscal situation. we need to make sure we can live within our means of the country.
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we can see from the outliers in europe and portugal what happens if you do not have a critical plan for the situation. the risky thing to do would be to not get a grip. in the u.k., we have reduced the risk by having a credible plan. in america, i was there over the last couple of weeks. all parties now agree and they are starting to say that they need to act. >> what is the argument then, professor? >> i do not agree with anything mr. hancock said. the evidence is that this will contractions are not expansionary. that is what we've seen for every country in europe doing it. ireland, greece, portugal, the u.k., they have all gone into negative growth in 2010.
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as larry summers said over the weekend, the idea of having a contraction which generates expansion is moronic. there is no evidence around the world that these expansions have generated growth. they have compromised growth. mr. hancock is wrong. that is why central bankers have to keep interest rates down. >> the crisis in the banking system has become a crisis in sovereign debt and nations. we need to show we can deal with that. it is very well to say we must keep spending to keep growing, but it does not work. it is the risk you take when you try it at half. it is a catastrophic default or a close to default. that has been seen in some euro areas. >> we have had uncertainty before such as in 2008. the price of gold was not as high then. the dollar is deteriorating
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because of the debt. both parties of republicans and democrats agree need to reduce the budget deficit. they're not close on how to do it. obama attacked the leading republican, paul ryan, for his plan. that would cut $6 trillion. president obama does not have a plan to make cuts. the two parties are very far apart. that is why standard and poor's has warned the united states about possibly downgrading our triple a status. >> does obama have the wrong plan at the moment? >> let's go with the difference. in the u.k., the government has cut too quickly and too deeply. in the united states, there is an ongoing discussion between the political parties about what they will do in two years.
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there is no sense they are doing it. >> what has to happen imminently? >> to restore confidence, republicans and democrats have to agree on a budget that comes this next fiscal year. what comes eminently is a vote on raising the american debt ceiling. to do that, republicans say that they want serious cuts. democrats say no, they do not want cuts. we will be at an impasse in two or three weeks over the debt ceiling increase. >> thank you all very much, indeed. reminder of one of the most ancient rituals dating back to the reign of henry the fourth. it also serves as a kind of warm-up act for what will be an affirmation to the watching world that in the u.k., the monarchy is still firmly in place. britain has a history of radicalism and many leading
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countries are republics, why is it such a new to the affair? here is our political editor, michael creick. ♪ >> it is st. mary's church by the bridge. just after the first english civil war, it was the site of the famous party debates -- putney debate. in the 1600's, it was packed with agitated officers and civilians. early democrats wanted to try the king for treason and abolish the monarchy. within just teed of years of the debates, they have partly gone with the wanted. there was the execution of
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charles the first and the abolition of the laws. over the next three and a 50 years, the monarchy would tumble all around europe. -- over the next 350 years, the markey would tumble all around your. it was all inspired by the english revolution of the 17th century. why has republicanism in this country never really caught on again? this week, it is a small gathering of some of today's republicans. they are planning their own street party for the royal wedding. it is an anti-royalist event. a lot of people would ask what it matters, what harm does the royal family do? >> in a democracy, we are to be equal citizens politically. it is also a matter of politics and power. there is all the power and the
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vested interest in the throne. it is not necessarily accountable and does not have constitutional limits on it. it is not transparent. >♪ >> in the bursts of royal pageantry every few years, weddings, funerals, and jubilees, a republican voices tend to be drowned out by the clamor of monarchism. beside the roots of next week's flooding, it is the banqueting house. outside, there is a small memorial to charles the first was executed here. inside, the splendor of ruben's commissioned by the stewarts to glorify the english monarchy.
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>> it shows the stuart king being crowned by angels representing james' believe in the divine rights of kings and absolute monarchy. he said that kings are god's representatives on earth. he said even by god himself, they are called gods. in british politics, republicanism is pretty much defined -- confined to the left of center. even then, labor politicians will avoid the issue. >> there are three reasons why labor politicians do not say much about the monarchy. many of them are monarchists. except the utility. they like the sentimentality. -- they accept utility. they like the sentimentality. some labor politicians do not think it is worth while making a fuss about. if a good. said that you will have 200,000
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houses built or abolish the monarchy, there would say there would not do. >> the former conservative mp was once a british republican on the right, a rare breed. no longer. >> my moment of apotheosis when my republicanism lapsed was when i debated on the same side against the monarchy in a huge tent in the rain. roy made a wonderful speech. he left in the green rolls- royce. it got stuck in the mud. all of the crowds have to push it. we got splattered in mud. i thought if we did not have a monarchy, we would have to have a president. it would be him or someone like that. i thought i would just stick with the queen. >> even in parts of the kingdom where republican feeling is strong like scotland and wales,
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the monarchy still has majority support. this store sells its rule takes to prince charles. -- royal takes to prince charles. do you think it is time for the monarchy to be abolished? would you like a piece of the royal cake? >> it is the government we want to get rid of. [laughter] off with their heads. >> yoold memorabilia is not as popular as it once was. would you keep it or abolish it? >> i would get rid of it. they do not earn their take. they get born with it. i would do away with it. i think you have to work for it and not be born into it. >> in the museum of london, there is the death mask of oliver cromwell. even as republic, he behaved as
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if the king. u.s. succeeded by his son, richard. the he was succeeded by his son, richard. after the restoration, in the glorious revolution. the kings and queens were constrained by parliament and the rule of law. the girl's family or parliamentarians during the civil war. family weres parliamentarians during the civil war. >> it is such a magic concept. it is the only concept the makes the government and humanity possible. >> in this day and age, is it elitist, outdated, privileged? >> yes, what is wrong with that? the league means the best. it does not mean privilege. -- elite means the best.
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it does not mean privileged. i do not think i will see a republic. i think will happen one day. it is an extraordinary anachronism. we only have to watch the wedding to realize it. most british people want celebrity. i do not think the british monarchy can survive by just being celebrities. i think in the end, he will go, but not for the next 25 years. >> british republicans will have to wait far longer than that if polls show how the wind is blowing. fewer than one in five people would abolish the british monarchy. that has been a constant fighting for years with little signs that opinion might turn the other way. -- that has been a constant results for years with little signs that opinion might turn the other way. >> he was a co-author of "the
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king's speech." joan smith, you may be losing the argument. >> what is interesting is that people say republicanism is on the back foot. more people are joining republicans. ships have doubled since last november. -- membership has doubled since last of lumber. i think there is a completely false impression. two reasons. the media is full of the royal wedding that most of us just tuck in the bin. the other is political failure. until politicians get behind it, there will not be a debate.
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>> no politician would expose an anti-monarchy view because he would not get elected. >> yes, but that shows the power of the popular press. any politician in the leading party who said they wanted to have a debate about a monarchy would be accused of being a traitor and attacking the queen. there is a big downside. it takes courage to do it. >> you believe the hereditary principle is to be admired in 21st century britain. >> yes, i do. i think it gives us stability and continuity. i think it is exciting. you have a head of state above politics who has been trained from birth. unlike anyone else in public life, we know exactly where they come from. we've known the queen said she was a little girl. we have known prince william since she was a little boy. that is not true of any politician.
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the queen is totally out of britain. she is the one person you can really trust is on the side of britain. >> it is not true the royal family is not political. when you go to parties and waiting for them to come in, people are very nervous around these people. they are not friendly. they are not relaxed. they depend on protocol. >> there is a residual political role. the monarchy is integrated into the political structure of the country. we cannot get away from that. in terms of effectively playing a part in politics, not anymore. -- in terms of actively played a part in politics, not anymore. >> we know the lineage and the constancy. that is a huge defection -- there is a huge affection for the queen that is undeniable. if the queen was a deeply unpleasant person, would you want it to continue?
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>> monarchists do succeed each other by birth. that also have to make a deal with parliament. they make a deal with the nation. if they are unsatisfactory, it is possible to remove them. look at the duke of windsor. off he went. there are others as well. they are not absolutely there. >> young people do not want ruritania. there is an interest among young people. do you think the monarchy will last until prince william would take over? >> i think so. there is the monarchy as an institution and one as an extension of show business. the show business side continues to have an appeal. that is integrated with celebrities. on the political side, there is difficulty in changing the whole constitutional system. >> there have to be some sort of
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revolution. >> if you look at countries that of gone from republics to monarchies in the last 100 years, almost all of them have been either after one of the world wars or dramatic events. it has sought happened in peacetime. >> you will always say that about political change. -- it has not happened in peacetime. who would have thought the mubarak were begun by the end of january. when the changes come, people wonder why they clung to the outdated ideas. we live in the 21st century democracy. we believe in the idea of equality, achievement, and a meritocracy. we put all our eggs in one basket. we choose one family and say they will represent us. i think this is where countries with an elected head of state are better off. you have someone who represents the country's values. obama being elected in the united states certainly
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expresses its aspirations. i live in a country where no black person has been head of state or a jewish person. that is observed. >> people running the country are politicians. they get elected and put out. they sometimes get put out dramatically. i think it was very good. there was a time when margaret thatcher went before john major. we knew the queen was waiting to deal with whoever turned up as the new leader. she will always deal with the elected prime minister and give them great support. she has huge benefits in this way. the first prime minister winston churchill was born in the 1800's. >> you saw the changes in the market came when he was thrust into the position. it was all very hush hush.
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now everything is much more open. there is less of a mystique to it all. will the lack of mystique mean that interest will wither away? >> there is still the constitutional function and symbolic function that will continue. look at sweden. it is a very progressive and modern country. it was dominated by the social democratic party. in their program, they have the abolition of the monarchy. there was talk about abolishing the monarchy. they decided to compromise in the 1970's. they removed every political role from the market. the monarchy remains with color and symbolism. but you do not have the sort of offensive involvement in the political process. >> you are still choosing one family almost random. >> we can shift froagain.
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>> things to evolve. things are very different now than at the beginning of the queen's reign. >> that is all for this week from all of us. goodbye. ♪ >> funding for this presentation is made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. the john d. and catherine t. macarthur foundation. and union bank. >> union bank has put its
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